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Conditional Sales Agreement for Hong Kong

Conditional Sales Agreement Template for Hong Kong

A comprehensive legal agreement governed by Hong Kong law that establishes the terms and conditions for a sale where the transfer of title is contingent upon specific conditions, typically the full payment of the purchase price or meeting other specified requirements. The agreement is structured to comply with Hong Kong's Sale of Goods Ordinance and Hire Purchase Ordinance, providing detailed provisions for payment terms, risk allocation, warranties, and remedies while protecting both seller and purchaser interests through clear specification of rights and obligations during the conditional period.

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What is a Conditional Sales Agreement?

Conditional Sales Agreements are essential legal instruments in Hong Kong's commercial landscape, particularly used in transactions where sellers wish to maintain title to goods until certain conditions are met, most commonly full payment of the purchase price. These agreements are governed by Hong Kong law, specifically the Sale of Goods Ordinance (Cap. 26) and Hire Purchase Ordinance (Cap. 441), and are commonly used in both business-to-business and business-to-consumer contexts. The document typically includes detailed provisions on payment terms, delivery arrangements, risk allocation, warranties, and importantly, the specific conditions that must be satisfied before title passes to the purchaser. This type of agreement is particularly valuable in high-value transactions or where the seller requires security until full payment is received.

What sections should be included in a Conditional Sales Agreement?

1. Parties: Identifies and defines the seller and purchaser with their full legal names and addresses

2. Background: Sets out the context of the sale and the parties' intention to enter into a conditional sale arrangement

3. Definitions: Defines key terms used throughout the agreement

4. Sale and Purchase: Details the goods being sold and the basic agreement to sell subject to conditions

5. Purchase Price and Payment Terms: Specifies the total purchase price, payment schedule, and method of payment

6. Conditions for Transfer of Title: Clearly states the conditions that must be met before title passes to the purchaser

7. Delivery and Acceptance: Specifies delivery terms, inspection rights, and acceptance procedures

8. Risk and Insurance: Allocates risk of loss or damage and specifies insurance requirements

9. Warranties and Representations: Sets out warranties regarding the goods and representations by both parties

10. Default and Remedies: Specifies events of default and available remedies

11. Repossession Rights: Details the seller's rights to repossess goods in case of default

12. Governing Law and Jurisdiction: Specifies Hong Kong law as governing law and jurisdiction for disputes

13. General Provisions: Contains standard boilerplate provisions including notices, amendments, and severability

What sections are optional to include in a Conditional Sales Agreement?

1. Security Interest: Required when additional security is taken over other assets or guarantees

2. Third Party Rights: Include when third parties have rights under the agreement, such as guarantors or beneficiaries

3. Import/Export Requirements: Necessary for international sales requiring compliance with trade regulations

4. Installation and Training: Include when the goods require professional installation or user training

5. Maintenance and Support: Required when ongoing maintenance or support services are part of the sale

6. Intellectual Property Rights: Include when the goods involve software, patents, or other IP rights

7. Data Protection: Required when personal data processing is involved in the transaction

8. Force Majeure: Optional but recommended for high-value sales or long-term payment arrangements

What schedules should be included in a Conditional Sales Agreement?

1. Schedule 1 - Description of Goods: Detailed technical specifications and description of the goods

2. Schedule 2 - Payment Schedule: Detailed breakdown of installment payments, amounts, and due dates

3. Schedule 3 - Delivery Schedule: Timing and logistics of delivery if multiple deliveries are involved

4. Schedule 4 - Acceptance Tests: Specific criteria and procedures for accepting the goods

5. Schedule 5 - Warranty Terms: Detailed warranty terms, conditions, and claim procedures

6. Schedule 6 - Maintenance Requirements: Required maintenance procedures to maintain warranty coverage

7. Appendix A - Form of Notice: Standard forms for various notices required under the agreement

8. Appendix B - Certificate of Title: Form of certificate to be issued upon satisfaction of conditions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions










Clauses








































Relevant Industries

Manufacturing

Industrial Equipment

Automotive

Technology and Software

Heavy Machinery

Construction Equipment

Medical Equipment

Agricultural Equipment

Renewable Energy

Telecommunications

Transportation

Retail

Relevant Teams

Legal

Sales

Procurement

Finance

Risk Management

Operations

Compliance

Credit Control

Business Development

Contract Management

Relevant Roles

Legal Counsel

Commercial Director

Sales Manager

Procurement Manager

Contract Administrator

Finance Manager

Credit Controller

Risk Manager

Business Development Manager

Operations Manager

Chief Financial Officer

Compliance Officer

General Counsel

Sales Director

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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